What Are They Thinking? The Daily Beast's Mike Dyer, Against Wishful Thinking
What is The Daily Beast exactly?
It’s not one of the high-flying venture-fueled news companies we read so much about these days, like Vox or Buzzfeed, given its Barry Diller–IAC ownership. It’s not a legacy magazine or newspaper company, though its founder Tina Brown came out of that world. Despite the early Brown–Huffington comparisons, the Beast’s voice differs strongly from that of The Huffington Post, a site just three years its senior. The Daily Beast may not be one of a kind, but it’s hard to place it in any category, or to put anyone else in its group.
This is what we know from data: It’s one of the fastest-growing news and information sites year-over-year in the “General News” category. With a Comscore growth rate of 52 percent year-over-year, as compared to 31 percent for the top 25 news sites overall, The Daily Beast drives more than 12 million unique visitors a month, surpassing some notable legacy magazines. Its story, though, is more intriguing as we look at three factors underpinning its growth: mobile, millennials and content marketing. Those words now seem commonplace; it’s the particular way The Daily Beast arranges the Legos that distinguishes it.
Mike Dyer, who turned 34 yesterday, became managing director and chief strategy officer last spring. If it weren’t a hackneyed term, we could call his leadership Daily Beast 2.0. The Beast can recount a colorful history from its Tina Brown roots through its tragic May–December marriage with Newsweek, the operatic divorce and now its arrival as a business-model leader in the wide, wacky world of digital news and features.
Dyer arrived at the Beast in December of 2012 the same week the printed Newsweek was declared dead, and then spent the next four months of his life coming up with the all-digital Newsweek version. When IAC C.E.O. Barry Diller sold off Newsweek to I.B.T. Media (which relaunched it in print a year ago), Dyer could turn his attention fully to the Beast. He works closely with both editor-in-chief John Avlon and Sarah Chubb, a highly respected Condé Nast veteran, who serves as senior advisor.
It’s the kind of attention he brings to his site that stands out among the many news executives with whom I talk. Dyer brings a sociologist’s curiosity to his craft.
“It’s as important to talk about the business from a behavioral point of view as an editorial point of view or a technological point of view,” he told me. “There are so many ways to take your eye off the ball, much less subject to the whims of technology or trends. That’s been the core focus of my work.
“Everything has flowed from an ‘It’s the behavior, stupid,’ approach.”
How did Dyer hone that belief? Out of chaos, we might say, the same kind of chaos that engulfs almost all media business executives. As they try to parse what’s real from what’s trending in their business lives, they often feel like they know less than than they’d like to.
Dyer turned to data. Hired by the Boston-based ad agency Hill Holliday, Dyer’s first job, in 2008, was to make sense of Silicon Valley disruption. How to do it?
At first, he was flummoxed. Then, he told me, he decided to “focus on what the readers are actually doing, not on what we wish they were doing.” That focus helped him create a successful, now six-year-old content marketing business for Hill Holliday, which in turn has illuminated his thinking about Daily Beast.
As an example, many publishers still treat their digital products like the old print ones. For all the discussion of “sideways” traffic—news reading, by way of social and search that brings readers to individual story pages and not the home page—most publishers still put disproportionate resources into the home page. While paying homage to the “front”, the evolving Daily Beast mobile products more richly understand it’s a sideways content world and include features to encourage more—sideways—reading. “What do you do to organize your team to take action on these behaviors?” The application: changes in resource allocation and workflow, the kinds of changes most legacy companies find so difficult to make.
This behavioral thinking plays out in the Beast’s three key strategies:
Millennials: Today, three-quarters of the Beast’s readership is a combination of Millennials and Gen X, the key emerging targets of the digital news business for everybody (“The Newsonomics of the Millennial Moment”). Eighteen– to 37-year-old millennials make up only 27 percent of the U.S. population and Gen X (38-47) 13 percent, but their digital habits and spending power double their attractiveness. Legacy news businesses may be stronger with (48-to-67-year-old) baby boomers, but that 25 percent of the U.S. population becomes a smaller slice of the pie over time.
Dyer found that Millennials had “a consumption behavior very much in line with our editorial ethos. That’s high–low. You are not reading The New York Times at 10 a.m. and Buzzfeed at 4 p.m. We provide some highly intellectual and some, uh, everyday content, at the same time.” The spiritual roots of The Daily Beast, true to a Tina Brown creation, may have been high–low, but its products looked much like other news sites. So, in new product creation, Dyer has tried to match the product to the content, mixing and matching high–low in ways most news sites don’t.
“That fits how Millennials read,” he says simply. That matching includes “quantified self” touches on the smartphone (“The Newsonomics of the Daily Beast’s Quantified News Reader”) and, a new quick-read list, tailored to phone reading, later this month.
Content Marketing: By the end of 2014, 55 percent of the Beast’s ad revenue derived from content marketing, a percentage several multiples higher than most publishers. Dyer believes traditional digital display is dead-ending in endlessly lower prices and lack of reader utility.
Lexus, Starbucks, Pepsi and Macallan are among the top-drawer advertisers to use Daily Beast in the last year. Lenovo’s six-month campaign, “The New Alphas,” shows the stretch of content marketing’s commercial utility. It manages to personify Lenovo’s target market of youthful active leaders, while touting its products’ features engagingly. Further, Lenovo’s messaging pops up from in various parts of the sites, apps and newsletters of the Beast, becoming near-inescapable.
“Content marketing is more than native. It solves pre-existing user problems. Journalism solves some user problems, and branded content solves other problems,” Dyer told me.
What kinds of problems? Very basic ones, certainly.
“I want to see headlines. I want to be less bored. I want to find an ATM,” he said.
“We take the big tent approach to content marketing, bigger than native, which too often means ‘we give you our look and feel.’ We want to know what problems our journalism solves and what problem our content marketing solves.”
The business model here is sophisticated, incorporating ad creation, ad promotion and ad display in content marketing, a three-pronged approach to the new craft of commercial storytelling.
Daily Beast offers content marketing promotion in four or five differing products, from its Brandbeast, a commercial “homepage vertical” to placements on its top-of-page carousel and within its newsletters, This “promotional” placement helps differentiate the Beast approach to content marketing; it’s not just selling one ad position for “native advertising.”
Just last week, Dyer and Sarah Chubb brought on Bill McGarry, a digital–print ad veteran with key experience, including Hearst Magazines, in content marketing. McGarry takes on the job of chief revenue officer.
Mobile: The Beast faces the profound shift to mobile reading—smartphones and tablets now drive 56 percent of its traffic—that all publishers are seeing. Its growth in mobile traffic is high, 91 percent year over year. Social drives 25 percent of that traffic.
Like the smarter publishers, the Beast now sells, and optimizes, its ad campaigns across all audiences, delivering ad audience as deftly on the smartphone as on the web. That’s a foundation for harvesting value from the astounding mobile transformation.
As important is that watching of mobile behavior. The Daily Beast on the smartphone looks little like its web counterpart, and looks less like it with each new rev. As it watches what it audiences do, how they move from story to story from ad to story and from story to ad, small tweaks and larger redesigns push forward with goosing those mobile “time on site.” The Daily Beast apps and experiences appear mobile native, and the natives are responding.
Under the Hood: Engagement is good, all publishers can agree. In 2015, though, they need to know what kind of engagements produce what returns. Consequently, a deepening harvesting of data underpins each of the three Beast pushes.
For instance, the Beast’s focus on interactivity is much more than an eagerness to satisfy connective Millennials. The Beast puts a price, or value, on the differing kinds of interactions its products encourage. An exchange of personal information—newsletter sign-up, profile sign-in, phone # submission—ranks highest. Lowest would be the exchange of time, aka reading or viewing. In between: the exchange of influence and opinion, as in tweeting content, sharing content on Facebook, commenting.
“Each of these value exchange actions has a price floor driven by C.P.M.s,” says Dyer. “Through testing, we are able to increase that floor by incentivizing the most valuable of these existing value exchanges that happens millions of times per day. For example, a share or tweet is worth more than a single article read because we return an average of more than 100 additional users for each share. This has led us to investigate and test such things as our ‘Tweet Lock’ product feature, which requires users wishing to participate in a Live Q+A to tweet a pre-populated “happening now” message before gaining access to the Q+A. There are many more examples that I can share, but the core idea is to create incentivizing product features to increase the most valuable actions.”
It’s all a far cry from reporting print circulation results every six months.
Mike Dyer’s theories stand in the forefront of sense-making in digital news, but what do we know about the results? As a large, diversified digital company (Ask, Match.com, Vimeo, Tinder), IAC doesn’t break out its financials in much detail. Despite added investment, especially in mobile and in content marketing, The Daily Beast should soon finally find black ink. The Beast can point to expected revenue growth of 50 percent year over year and growing average deal size, both of which would outpace most of the competition. Things seem to have settled down for the company; IAC shows no signs of selling it. Though still hard to categorize, it may be seen for what it is, a significant player in the digital news wards of 2015.
First published at Capital New York
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